Toronto - The hot topic of whether pension surpluses should be
divided at the time of mass layoffs is headed to the Supreme Court of
Canada.

The highest court in the land agreed yesterday to
hear an appeal in a widely watched case involving 146 former employees of
Monsanto Canada Inc.

Six judges with two lower courts have already ruled
unanimously that Ontario law requires companies to pay a share of any
surplus that might exist at the time of a mass layoff.

Monsanto and the Association of Canadian Pension
Management will now get one more chance to argue the law should be
interpreted differently.

The issue of how to treat surplus pension funds has
become hotter the farther that pension funds have fallen into a deficit
position during the last three years of stock-market losses.

Thousands of Ontario workers formerly employed by 200
other companies had stood to benefit from earlier Monsanto rulings by the
Divisional Court of the Ontario Superior Court of Justice and the Appeal
Court of Ontario.

Hopes were dashed last year when the province
proposed legislation that would have made workers wait to share in any
surplus if the entire pension plan were ever wound up. But the
election-bound Tory government backed down under intense pressure. Finance
Minister Janet Ecker announced last November that new legislation would be
introduced after more consultation.

Priscilla Healy, chair of the pension management
association's advocacy and government relations committee, said the law as
interpreted by the courts would pit the interests of former employees
against those of active employees and retirees.

"We are calling on Ontario to enact remedial
legislation similar to B.C., Alberta and Quebec as soon as possible to
ensure that the `dog-eat-dog' disease doesn't threaten their employees and
their pensioners," she said in a news release.

Lawyer Mark Zigler of Koskie Minsky said the Supreme
Court is not commenting on the merits of Monsanto's case by granting an
appeal. He predicted the Tories will be as happy as Monsanto about a
further delay of about a year to hear the case, and longer until a
judgment is rendered.

"It gets the government off the hook until the
case is heard, and certainly until the election."

He expects to seek intervener status for former
employees of National Trust Co. who want a share of pension surplus.

Monsanto sold the operations that employed the 146
workers who are seeking a share of about $19.1 million in surplus.